The market of circular fashion will need collective action. With the issues on sustainability that consumers experience, circularity is considered as the solution to unlock opportunities for a sustainable future.
In the fashion industry, less is more in terms of environmental protection. It suggests that the less effect on our planet, the more advantages it will have for people, businesses, as well as natural life. Among the best methods for the fashion industry is to lower its effect on the environment through measuring circular business models. In this case, companies will utilize different strategies for waste reduction and develop more efficient resource usage.
In 2021, circularity moves from fashion fringes to center stage. The driving force to act for the environment is to change the attitude of consumers. It is believed that purchasing decisions can be influenced by the environmental impact. In addition, policy-makers and regulators are working for upcoming activities to advocate circular practices like in the EU and disallow luxury goods destruction, which can be found in France.
Potential measures like the carbon border tax of the EU will advocate circularity through making onshore recycling as well as other circular projects. The circular business model is a big ambition and requires a long process.
Even though some players make efforts, about 12 % of fibers remain discarded on a factory floor, less than 1% of items are recycled for new garments, and around 25% of garments are still unsold. With these metrics, the effort is an inevitability and imperative. In fact, the circulatory system can be the game-changer in the next 10 years.
If the industry has progressed with Rs – recycling, reducing, reselling, refurbishing, repairing, and renting – some companies are still unsure regarding the standard of the challenge. Even though some players have good intentions, the volume of garment production is estimated to grow about 2.7 % yearly between this year and 2030. Therefore, the goal needs to set circular techniques, take action for scaling solutions and handle scalability challenges.
The Problems for Scaling Circularity
Methods where the value was made in circular systems differ from the methods made for linear systems. In fact, a garment can make value over again through repeated rental, sale and resale, repaired, being sold, refurbished, returned, resold, or recycled. The top retailers were involved in this value-multiplier strategy.
For example, the Selfridges’ Project Earth wants to assist customers in buying the ‘pre-loved’ items or rent and repair. Depop, an app for peer-to-peer social shopping resale, view a 300% increase yearly for sold items during the pandemic crisis. It shows that the consumer demand for pre-owned purchases continues to rise.
Meanwhile, the following are the main barriers that avoid scale adoption:
- Circularity comes with a complexity web of logistics
Recently, transactions in resale are peer-to-peer wherein consumers decide if the resale value is energy and time-efficient to photograph, wash, send, describe, and package. The analysis of ‘Fashion on Climate’ shows that in 2030 about 20% of garments require to be listed with circular business models, which needs greater scale. For example, in a subscription rental framework, the main challenges are logistical, which includes delivery and laundry.
- Getting value needs recyclability or durability
If there’s no recyclability or durability, there can be product value erosion. Refurbished products could have a high cost if the refurbishment was reliably carried out. It may be challenging since clothes are stained or stretched and accessories marked or scratched. Moreover, recycling can be difficult if the garments come with mixed materials.
- Attracting customers need to overcome stigmas
Even though circularity increases, it remains a conceptual idea to terms like up-cycled, recycled, refurbished, and repaired still come with negative connotations. In addition, customers want to return orders with the refund incentive.
How to Scale Circularity?
The ecosystem of apparel is fragmented. Therefore, standardized solutions will not emerge anytime. However, there are various strategies led by a diverse group of players and maintain based on 3 foundational potentials:
- Accepting sustainable design
The concept of circularity can begin on a drawing board with the materials and textiles that were used by designers for their productions. For example, it is a good solution to design for zero waste, which needs product and material innovation.
With this, companies must incubate, invest, test, and pilot alternative procedures and materials for the circulatory system. It is also a good idea to make momentum through collaboration and the development of tools. Companies should radically lessen waste production. They must train and support suppliers to reuse and reduce chemicals, fiber, and use compostable packaging. It is also helpful to improve designers’ skills and induce circular design innovation.
- Support customer adoption
Adopting circularity can be a natural way for younger customers. On the other hand, older consumers need encouragement and education. Most consumers believe that there is a problem with hygiene on second-hand clothing.
Digital involvement is essential as the circularity grows. If the circulatory system continues, companies must provide rental options like the option to get products for rent or get subscription services. They must also offer care and repair tips and develop data techniques to inform business decisions.
Companies may also allow peer-to-peer deals like rental and resale and enhance the deal with digital solutions and logistics.
- Reverse logistics
With the help of reverse logistics, companies can recover the items from secondary resale and disposal. Brands join forces with intermediaries to implement the process. In this way, companies must enhance store networks to make in-store circulatory hubs. They should design reverse logistics to improve value retention through partnering with a reliable intermediary.
Advocating the Circularity’s Future
Circularity is among the essential business trends for the next 10 years. Collective action is needed wherein the customers, fashion companies, and participants collaborate for the value chain.
It is expected that mass-market companies in scaling their efforts. As customers are more involved with issues on sustainability, circularity will be the solution to unlock the opportunities to improve the future of sustainability.
To sum it up, circularity in the fashion industry this 2021 can greatly contribute to the reduce the impact on the environment. Companies need to apply the best strategies to produce the best results.
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